Bert Baker and Ernestine Moffet were never formally married but have lived together as husband and wife for the last 14 years. Bert and Ernestine reside in Washington, D.C., a jurisdiction that recognizes common law marriages as valid. Consequently, they filed both a joint district income tax return and a joint federal income tax return for the last eight years. Bert and Ernestine are planning to move their household to Frederick, Maryland, and become permanent residents of that state. Maryland doesn’t recognize common law marriages. Will Bert and Ernestine’s change in residence allow them to avoid the marriage penalty by filing as single individuals?
Answer to relevant QuestionsBill Young, a single taxpayer, reported the following information on his 2015 Form 1040: Salary from part-time job ……………………… $ 16,600 Interest on savings account ……………………. ...Issue Recognition Problems Identify the tax issue or issues suggested by the following situations and state each issue in the form of a question. In November, Mr. K discovered that his combined income tax withholding and ...Two years ago, Corporation WZ granted a stock option to employee R to purchase 2,500 shares of WZ stock for $30 per share. Since the date of grant, the market price of the stock has risen steadily and reached $31 just days ...This year, publicly held Corporation DF paid its CEO a $1.4 million salary, only $1 million of which was deductible. It also accrued a $200,000 liability for deferred compensation payable in the year 2019 (when the CEO must ...Mr. T (a 45-year-old single taxpayer) exercised an ISO and purchased $380,000 worth of his employer’s stock for only $113,000. His only other income was his $158,500 salary, and he doesn’t itemize deductions. Compute Mr. ...
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